No Way Out

Excerpt from Powers Energy Investor, March 1st issue
With the unrest continuing in the Middle East and northern Africa, we are rapidly heading towards a crossroads in the history of energy supplies. More specifically, the shutting in of approximately half of Libya’s oil production in the last week of February will mark the first of several meaningful supply disruptions that will push oil prices well north of current levels. The intractable problems of unemployment, rampant food inflation and religious hostilities that have caused the recent overthrow of Tunisia and Egypt and the imminent overthrow of Libya may soon manifest themselves into political unrest and potential regimes changes in both Kuwait and the kingpin of world oil exports, Saudi Arabia. There is simply no way out of the current strife for these two regimes.

Despite efforts to improve their public images through nominal reforms, the Kingdoms of Saudi Arabia and Kuwait are far from free and open societies. Though Kuwait, which produced 2.48 million barrels of oil per day (bop/d) in 2009 according to BP Statistical Review, is considered a constitutional monarchy since it has a legislature that is allowed to consult with the ruling family, the parliament has been consistently overruled and on occasion dissolved when the royal family gets tired of its calls for reform. The parliament has been dissolved five times since 1976 and as calls for reform have grown louder, parliament has been dissolved three times in the last five years. In December 2010, Kuwait revoked the broadcast license and banned Qatar-based Al Jazeera news network after the network decided to defy government orders and interview outspoken Parliament member Musallam Al Barrak. The expulsion of Al Jazeera sparked a violent confrontation between protesters in Kuwait City and police.

In addition to protests over freedom of the press, Kuwait has also seen protests of lack of basic rights to its Bidun or Bidoon people. These descendents of Bedouin tribes, estimated to number between 100,000 and 120,000, are not recognized as Kuwaiti citizens and have no rights since their ancestors did not register with the government in 1920 when the citizenship program was established and therefore are not considered Kuwaiti. Unlike Kuwaiti citizens, Bidoons receive no healthcare, education and have very limited employment opportunities. On February 18th approximately 1,000 Bidoons took to the streets of Jahra, a city 32 kilometers northwest of Kuwait City and clashed with police. According to news reports, more than 120 protesters were arrested and more than 30 were injured (Source: Eurasia Review). While the Kuwaiti government has made efforts to identify and grant citizenship to Biduns who can prove their lineage, the government appears to many in the Bidun community to be moving far too slowly.